About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2022
>>
[2022] ZAKZPHC 34
|
|
Maharaj's Coach and Bus Hire CC v Dealership Middelburg Man (Pty) Ltd and Others (14058/2018P) [2022] ZAKZPHC 34 (10 August 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
number: 14058/2018P
In
the matter between:
MAHARAJ’S
COACH AND BUS HIRE CC
Plaintiff
and
DEALERSHIP
MIDDELBURG MAN (PTY) LTD
First Defendant
STANDARD
BANK OF SOUTH AFRICA
Second
Defendant
SOUTH
AFRICAN LINK SAFARIS CC
Third
Defendant
Coram: Koen
J
Argument
heard on: 15
June 2022
Delivered: 10
August 2022
ORDER
(a)
In respect of the plaintiff’s
claim in convention the following orders are granted:
(i)
It is declared that the agreement
concluded between the plaintiff and the first defendant in respect of
the purchase of the new
MAN bus is cancelled;
(ii)
The first defendant is directed to pay
an amount of R340 000 to the plaintiff together with interest thereon
at the prescribed rate
a tempore
morae
from date of judgment to date
of payment;
(iii)
The further relief claimed is dismissed;
(iv)
The first defendant is directed to pay
one third of the plaintiff’s costs of the claim in convention.
(b)
The first defendant’s claim in
reconvention is dismissed with costs.
(c)
In respect of all costs previously
reserved, each party is directed to pay its own costs.
JUDGMENT
Koen
J
Introduction
[1]
This is an action in
which:
(a)
the plaintiff,
Maharaj’s Coach and Bus Hire CC, seeks damages from the first
defendant, Dealership Middelburg MAN (Pty) Limited,
arising from an
alleged repudiation by the first defendant, and the resultant
cancellation of an agreement relating to the purchase
by the
plaintiff of a new 2018 26.360HB4 MAN bus (the bus); and
(b)
the first
defendant, in its counterclaim, seeks specific performance of the
agreement, claiming payment of the balance of the deposit
alleged to
have been required to be paid and remaining outstanding by the
plaintiff in respect of the purchase of the bus, against
which
payment it be ordered to deliver the bus to the plaintiff.
[2]
The disputes between
the parties were initially sought to be determined by way of
application proceedings commenced by the plaintiff
on 12 December
2018.
Various material disputes
were identified
on
the papers, which were referred to oral evidence by Ploos van Amstel
J on 21 June 2019. The costs of the application and the
hearing
before him, were reserved for decision by the court hearing the oral
evidence.
[3]
The
parties thereafter applied for the matter to be referred to trial. A
consent order to that effect was granted by Potgieter AJ.
The wasted
costs were reserved and all previous reserved costs orders remained
reserved for determination by the trial court hearing
the matter.
Pleadings were thereafter exchanged in respect of both the
plaintiff’s claim in convention and the first defendant’s
claim in reconvention. This judgment relates to the trial which
proceeded before me.
Background
[4]
The purchase price of
the bus was the sum of R2 941 800. The acquisition of the bus was to
be financed by the second defendant,
the Standard Bank of South
Africa. It agreed to finance the balance of the purchase price after
deduction of the sum of R750 000,
which the plaintiff had
offered, and which the second defendant required to be paid, as a
deposit. The plaintiff claims no relief
against the second defendant.
[5]
The disputes
between the parties trace their origin to the requirement of the
deposit of R750 000. It is not disputed that R340
000 was received by
the first defendant in part payment of the deposit. The R340 000 was
the full deposit previously required and
indeed paid to the first
defendant by South African Link Safaris CC, the third defendant in
respect of a transaction for the acquisition
of the same bus pursuant
to a written offer to purchase completed and signed on 25 July 2018.
The third defendant is a close corporation
of Leshen Maharaj
(Leshen), the son of Mr Deonarain Maharaj (Mr Maharaj) who is the
driving force behind, and who at all material
times represented, the
plaintiff. The third defendant’s application for finance for
the balance of the purchase price of
the bus to various financial
institutions was however unsuccessful. The acquisition of the bus by
the third defendant was consequently
aborted. The plaintiff was then
substituted in the place of the third defendant as the purchaser of
the bus. It was agreed between
the third defendant and the plaintiff
that the R340 000 already paid to the first defendant would be ‘made
over’ to
the plaintiff and used as part payment of the deposit
of R750 000. The first defendant accordingly retained the R340 000
which
had been paid to it by the third defendant on that basis. The
above facts are not in dispute. No relief is claimed by the plaintiff
against the third defendant either.
The
parties’ contentions
[6]
The central dispute relates to the
balance of the deposit in the sum of R410 000.
[7]
The plaintiff
alleges
that the first defendant, represented by its salesman, Mr Lourens van
Staden (Mr van Staden), agreed to accept an old Mercedes
Benz bus
(‘the Mercedes bus’) which the plaintiff had previously
left with the first defendant for possible sale on
a consignment
basis, as a trade-in to cover the balance of R410 000.
On
the plaintiff’s version it had no further outstanding
obligations and it had become entitled to the delivery of the bus
to
it. It also contends further that the first defendant had demanded
payment of the sum of R420 000 before it would deliver the
bus, and
that such demand was in excess of what was due to be paid, even on
the first defendant’s version.
[8]
The first defendant
denies any agreement that the Mercedes bus was accepted as a trade-in
to make up the outstanding deposit amount
of R410 000, and
pleads that the balance of the deposit was required to be paid to the
first defendant. Until such time as
the plaintiff paid the deposit in
full, the first defendant would be excused from delivering the bus to
the plaintiff.
As the deposit was
not paid in full, the first defendant refused to deliver the bus to
the plaintiff.
[9]
It is the first defendant’s
refusal to accept the Mercedes bus as a trade-in, and further the
demand for R420 000 when R410
000 was outstanding on the deposit,
resulting in the bus not being delivered to it, which the plaintiff
contends constitutes a
repudiation and/or breach. Pursuant thereto it
cancelled the agreement on 8 October 2018 in an email sent by its
attorneys to the
first defendant. It accordingly claims damages to be
put in the position it would have been in had the agreement not been
concluded.
The first defendant in turn claims payment of the balance
of the deposit, against which it be ordered to deliver the bus to the
plaintiff.
The
pleadings
[10]
Claim 1 in the
plaintiff’s declaration is for a declaratory order that the
agreement concluded between the plaintiff and the
first defendant on
19 September 2018 was cancelled, and for damages relating to
instalments paid and in the future to be paid by
the plaintiff to the
second defendant in terms of the finance agreement concluded between
them, insurance premiums paid and future
insurance premiums to be
paid by the plaintiff in respect of the bus, licensing fees paid and
to be paid in the future by the plaintiff,
and for the R340 000.00
paid in respect of the deposit. Claim 1 totalled R2 929 535.20.
Claim 2, in the alternative
to claim 1, was based on an alleged
fraudulent misrepresentation and was for payment of the sum of R1 502
806.90.
[11]
The first defendant
defended the relief claimed by the plaintiff and counterclaimed. The
first defendant’s ‘counterclaim
1’ is for payment
of the balance of the deposit in the sum of R410 000.00 against which
it be ordered to deliver the bus
to the plaintiff. Its ‘counterclaim
2’ is for storage costs of the bus in the sum of R233 162.50.
The
issues persisted with in the trial
[12]
The plaintiff did not
persist with its claim 2 and reduced its claim 1 to R2 436 104.58
calculated as follows:
Payments
as instalments from 20/10/2018 to 20/3/20
at
R87 545,05 per month
R1 575 819,00
Payments
as instalments from April 2020 to June 2020
at
R87 545 x 3 months
R
265 191,00
Insurance
at R5 092.86 for 20/09/2018 to 01/03/2020
R
89 052.68
Licence
fees – 2019
R 119 937.90
Licence
fees – 2020
R 46 104.00
Deposit
R
340 000.00
R2
436 104.58
[13]
As there was a
bare denial of the plaintiff’s claim for damages, the plaintiff
bears the onus to prove its damages as pleaded.
[14]
The first defendant
did not lead evidence on its claim for storage costs and formally
abandoned this claim in its heads of argument.
This judgment
accordingly only deals with plaintiff’s claim 1, as amended and
set out above, and the first defendant’s
counterclaim 1
for payment of the R410 000 against which it be directed to deliver
the bus to the plaintiff.
The
agreement
[15]
It
is regrettable that the allegations in the plaintiff’s
declaration were not helpful in crisply identifying the true issues
in dispute between the parties. The rules regarding pleadings and
practice require that the plaintiff’s case be pleaded in
separate distinct averments
[1]
setting out in clear concise statements the material facts upon which
it relies
[2]
for the relief
claimed. Instead, the declaration reads in places like extracts from
the affidavits in the application, which it
was conceded during
argument to be. The declaration followed a narrative form, with
reference to various annexures annexed thereto,
which were invariably
referred to with the injunction that ‘the contents of [the
particular annexure] be incorporated herein
as though specifically
averred to.’ That is contrary to accepted practice.
[3]
It is not expected of a court, even in application proceedings, to
have to trawl through annexures to try and determine which
portions
of the annexures are relevant, and to identify the possible
facta
probanda.
[16]
It
is crucial to identify the agreement which the plaintiff maintains
was cancelled. It is necessary to identify the material terms
and
conditions of what was truly the transaction relating to the
acquisition of the bus, because that is relevant not only to
determining whether there was a repudiation, but also in determining
what damages might arise from or might be recoverable following
the
cancellation. As a matter of law, damages arising from a cancellation
of an agreement are those that arise directly from the
breach of the
agreement and/or were within the contemplation of the parties at the
time of the conclusion of the agreement as the
reasonable and
probable consequence of such breach.
[4]
[17]
The plaintiff’s
retort to the above criticism has been that the agreement it relies
on is admitted on the pleadings. That
is partly correct, but the
difficulty is that what is alleged and admitted is not always
consistent with the underlying documents
and evidence annexed to the
declaration in support of the agreement, or the damages claimed. This
is particularly so where the
annexures have been annexed on the basis
that
‘the contents of [the
particular annexure] be incorporated herein as though specifically
averred to.’
[18]
Insofar as there is
an admission of the agreement on the pleadings, the following is
apposite. In prayer (a) to its declaration
the plaintiff seeks a
declaratory order that the agreement ‘averred to at paragraph
6.1 (a) to (f) . . . [of the declaration]
is cancelled.’ The
agreement relied upon by the plaintiff in those paragraphs is pleaded
as follows:
‘
6.1
Accordingly and during on or about the 19
th
September 2018, telephonically and at Pietermaritzburg, the Plaintiff
represented by Maharaj and the First Defendant represented
by Van
Staden had concluded a, partly written and partly oral agreement, the
material express terms of which were the following:
a)
The Plaintiff would purchase the new MAN
bus from the First Defendant for a purchase price of R 3, 383 070.00
(THREE MILLION THREE
HUNDRED AND EIGHTY THREE THOUSAND AND SEVENTY
RAND);
b)
A deposit of R 750, 000.00 (SEVEN
HUNDRED AND FIFTY THOUSAND RAND)
would
be deducted from the purchase price referred to 5.4 (a) hereinabove
which was made up of:
i.
The R 340, 000.00 (THREE HUNDRED AND
FORTY THOUSAND RAND) paid as a holding deposit by the Third Defendant
to the First Defendant
for the new MAN bus as averred to at paragraph
5.4 (c) hereinabove, which amount was made over by the Third
Defendant to
the Plaintiff;
ii.
The R 410, 000.00 (FOUR HUNDRED AND TEN
THOUSAND) trade in value placed on the Mercedes Benz bus which was in
the possession of
the First Defendant for resale on a consignment
basis as averred to at paragraph 5.4 (b) hereinabove.
c)
The Second Defendant would pay to the
First Defendant the remainder of the purchase price in the sum of R
2, 633 070.00 (TWO MILLION
AND SIX HUNDRED AND THIRTY THREE THOUSAND
AND SEVENTY RAND) on behalf of the Plaintiff;
d)
The Plaintiff would have to pay no
further monies to the First Defendant save for those averred to in
paragraph 6.1 (b) (i to ii)
hereinabove to conclude the transaction;
e)
Van Staden on behalf of the First
Defendant would deliver the new MAN bus on or before 20
th
September 2018 to the Plaintiff;
f)
The First Defendant would, upon securing
the purchase price in terms of paragraph 6.1(a) to (c) above,
obtain
a written letter of authority from the Plaintiff to
license and register the new MAN bus into the name of the Plaintiff
as required by the National Road Traffic Act of 1996 (“NRTA”),
with the Plaintiff to pay the license fee therefore.’
[19]
In response to those averments the first
defendant pleaded that an oral agreement was concluded between it and
the plaintiff on
or about 10 September 2018 in terms of which the
plaintiff agreed to purchase the bus from the first defendant, in
terms of the
second defendant’s approval of the plaintiffs
finance, including that the plaintiff was however obliged to pay a
deposit
in the amount of R750 000 to the first defendant. What is
significant from this plea is that it already alluded to the
involvement
of the second defendant as a material party to the
purchase the bus. The inter relationship of the agreement between the
plaintiff
and the first defendant, the agreement between the first
defendant and the second defendant, and the agreement between the
plaintiff
and the second defendant, all identified below, was however
not dealt with further in the pleadings.
[20]
The averments in the pleadings were
furthermore not always fully consistent with the contents of the
various annexures to the declaration,
and the evidence adduced during
the trial. Even if the plaintiff, in colloquial terms, ‘purchased’
the bus, legally
the terms of the agreements governing the purchase
of the bus went much wider than a purchase and sale agreement
confined to only
the plaintiff and the first defendant as contracting
parties.
[21]
A number of documents attached to the
declaration as annexures, were generated in the process of giving
effect to the transaction
relating to the acquisition of the bus.
They include the following:
(a)
The
first
defendant issued a tax invoice dated 19 September 2018,
[5]
to the second defendant. This invoice is the underlying document to
the agreement between the first and second defendants. The
invoice
reflected the full purchase price of the bus as R2 941 800 ‘Less
Deposit’ of R750 000, to which VAT of R441
270 was added,
resulting in the balance required to be financed by the second
defendant of R2 633 070. The invoice recorded that
although the
second defendant was invoiced, the first defendant would ‘deliver
[the bus] to’ the plaintiff, being the
mutual customer of the
first and second defendants.
(b)
On
20 September 2018 the plaintiff and the second defendant signed a
written ‘Authority to release goods’ (the release
note).
[6]
It contains
a
‘Confirmation of receipt by customer’ portion in which
the plaintiff confirmed that it had satisfied itself as to
the
condition of the bus and acknowledged when the risk would pass. The
passing of the risk would obviously impact on the plaintiff’s
obligations inter alia to insure the bus. In the release note the
second defendant, following receipt of certain confirmation by
the
plaintiff, confirms that the first defendant may release the bus to
the plaintiff, obviously on behalf of the second defendant
as the
second defendant would be the legal owner of the bus, with payment to
be made by the second defendant to the first defendant.
(c)
On
20 September 2018 the plaintiff and the second defendant also
concluded a written instalment sale agreement
[7]
in respect of the purchase of the bus, which required the financed
portion of the purchase price together with finance charges
and other
costs, to be paid by the plaintiff to the second defendant in 36
monthly instalments of R87 214.63 each, commencing from
20 October
2018 and terminating on 20 September 2021.
The
second defendant thereafter paid the remainder of the purchase price
in respect of the bus in the sum of R2 633 070, as reflected
in the
invoice, to the first defendant.
[22]
As
will already be apparent from the brief statement of the contents of
these annexures to the declaration, any obligation to pay
the
instalments on the bus in order to purchase it, and to insure the
bus, which are claimed by the plaintiff as damages, were
not part of
an agreement to which the first defendant was a party, but arose from
the provisions of the instalment sale agreement
between the plaintiff
and the second defendant. Further, as evident from the invoice, the
first defendant invoiced and sold the
bus to the second defendant,
for delivery on its behalf to the plaintiff. The evidence revealed
that this was pursuant to a Master
Supply Agreement and a Supplier
Agreement between the first defendant and the second defendant. The
latter were not pleaded in
the declaration although the plaintiff was
seemingly aware of the existence thereof, as the plaintiff’s
attorney’s
letter of 15 October 2018,
[8]
written shortly after the cancellation of ‘the agreement’,
expressly referred to ‘a standard Master Dealer Agreement.’
[23]
The terms contained in other documents
annexed to the declaration, for example the release note, dealing
inter alia with the passing
of the risk in and to the bus, were also
not averred separately in the declaration, albeit that the pleadings
stated that the ‘contents
. . . be incorporated herein as
though specifically averred to.’ So the contents of all these
annexures, whether material
and relevant or not, are part of the
declaration.
[24]
The material terms to which regard
should be had in determining the issues arising in this action,
governing the relationship between
the plaintiff and the first
defendant, the first defendant and the second defendant, and the
plaintiff and the second defendant,
must, more correctly, be sought
in the body of the plaintiff’s declaration, the annexures
thereto, and documentation introduced
during the evidence. Properly
interpreted they included the following:
(a)
The
plaintiff was for all intents and purposes substituted for the third
defendant as purchaser in the offer to purchase,
[9]
except that the reference to a trade-in, which in the context of the
purchase by the third defendant was also an incorrect description,
should have referred to a deposit of R750 000. The third defendant
never provided a trade-in. At the time when the plaintiff’s
finance was approved by the second defendant, there was also no
evidence of any talk between the plaintiff and the second defendant
of a trade-in at a value of R750 000;
(b)
The first defendant invoiced the second
defendant. The relationship between the first and second defendants
is regulated, amongst
others by the terms of the Supplier Agreement
between them. The material terms of the Supplier agreement included
the following:
(i)
On receipt of written advice from the
first defendant, the second defendant would, subject to the credit
approval for the plaintiff,
process the applicable transaction and
prepare the necessary documentation for the plaintiff’s
signature;
(ii)
The second defendant would advise the
first defendant of such approval and request a tax invoice to be
provided by the first defendant;
(iii)
On receipt of the invoice, the second
defendant would either approve or disapprove the tax invoice;
(iv)
Upon approval of the invoice an
authorization for the delivery of the bus to the plaintiff would be
issued by the second defendant;
(v)
Lastly, on receipt by the first
defendant of the signed delivery note by the plaintiff and all other
documents required by the second
defendant, the second defendant
would effect payment of the amount as stipulated on the tax invoice,
provided that where the plaintiff
has paid an initial payment to the
first defendant, it would be deducted from the full purchase price
and the first defendant’s
tax invoice would reflect the total
purchase price with ‘less initial payment/received on your
behalf.’
(vi)
As regards the risk, notwithstanding
anything to the contrary in any law or the Supplier agreement, the
risk in the bus would transfer
from the first defendant to the second
defendant upon delivery to and acceptance of the bus by the
plaintiff;
(vii)
The first defendant would upon delivery
of the bus pass good, valid free and unencumbered transferable right,
title and interest
in and to the bus to the second defendant and the
second defendant would be the owner of the bus and have valid and
absolute title
thereto, and no person will have any basis for
asserting the contrary.
(c)
The material terms of the Master Supply
Agreement Supplier Agreement included the following:
(i)
The sale of the bus to the second
defendant would be subject to the suspensive condition that the
second defendant successfully
concludes a credit agreement with the
plaintiff;
(ii)
Upon
the plaintiff and the second defendant’s final selection and
confirmation of the bus, the first defendant would issue
an invoice
to the second defendant reflecting inter alia a description of the
bus, the purchase price, the deposit received by
the first defendant,
and the plaintiff to whom delivery of the bus would be effected and
who will be accepting delivery of the
bus on behalf of the second
defendant;
[10]
(iii)
If the plaintiff pays the first
defendant a deposit, the actual value of such deposit had to be
reflected on the invoice in reduction
of the purchase price;
(iv)
The plaintiff had to inspect the bus and
take delivery, if satisfied;
(v)
The first defendant would deliver the
bus to the plaintiff acting as agent of the second defendant on the
written authority of the
plaintiff and the second defendant,
fulfilment of the second defendant’s documentation
requirements, signature of the delivery
note by the plaintiff,
receipt by the first defendant or the second defendant of any deposit
that the second plaintiff requires
the plaintiff to pay prior to
taking delivery of the bus on behalf of the second defendant, and
receipt by the first defendant
of written confirmation from an
insurance broker or insurance company that the bus is comprehensively
insured at the time of delivery;
(vi)
Ownership
of the bus would pass to the second defendant upon payment of the
purchase price to the first defendant by the second
defendant or upon
delivery of the bus to the plaintiff acting on behalf of the second
defendant, whichever occurs first;
[11]
(vii)
The
first defendant inter alia warranted to the second defendant that the
deposit had been paid in full by the plaintiff.
[12]
(d)
The relationship between the plaintiff
and the second defendant is governed amongst others by the instalment
sale agreement and
the release note. Some of the material terms
thereof have already been referred to above.
[25]
As
much as the above agreements must each be interpreted on their
own,
[13]
they are all part of
a composite tri-partite transaction which incorporates the terms of
the individual agreements. Alternatively,
and in any event, even as
separate self-standing agreements, they are interdependent. The
cancellation of the agreement between
the plaintiff and the first
defendant unavoidably would impact the instalment sale agreement
between the plaintiff and the second
defendant, and also the
agreement between the first and the second defendant. The
cancellation of the ‘purchase agreement’
means the end of
any right on the part of the plaintiff to claim delivery of the bus.
It would also mean the end to any obligation
to fund the balance of
the purchase price.
[26]
It is the failure to address the
cascading effect a cancellation of the agreement between the
plaintiff and the first defendant
would have, which has led to the
various problems in the
lis
before me, as I shall endeavour to show below. In particular,
firstly, it has resulted in declaratory relief being sought in regard
to the agreement between the plaintiff and the first defendant, as
limited in its scope as that may be, which impacts on the other
agreements referred to above. Secondly, damages are claimed which
arise from terms and obligations of the other agreements referred
to
above, which could not continue to apply and give rise to ongoing
continuing legal obligations, once the plaintiff had cancelled
the
agreement between it and the first defendant. It is logically
impossible to rely on obligations which arose from these other
agreements as being continuing, ongoing, binding obligations in law,
after the plaintiff cancelled the agreement it had with the
first
defendant. But more about that later.
[27]
The preliminary issue is whether the
first defendant had repudiated the agreement, such as it may be,
between it and the plaintiff.
If it was to be concluded that the
first defendant had not repudiated the agreement with the plaintiff,
then the plaintiff’s
claim in convention would fail and the
first defendant’s claim in reconvention should succeed. That
would avoid any further
discussion of the interdependence of the
various agreements identified above in the context of a claim for
damages. If there was
an unlawful repudiation, then the question
arises as to the impact thereof on the other agreements.
[28]
Although no specific relief was claimed
against the second defendant in that eventuality, the second
defendant was cited as an interested
party and it would have taken
note of the relief claimed by the plaintiff against the first
defendant, and presumably would have
appraised itself of the possible
impact such relief could have on its legal position. If it had any
concerns, which might have
caused it to hold a position other than
that it would await the court’s judgment in relation to the
plaintiff’s claim,
and thus effectively abide by this court’s
decision on the relief claimed, then it could have entered the
litigation. The
possible impact on the second defendant of the relief
claimed by the plaintiff against the first defendant might not have
been
spelt out in express terms by the plaintiff, but the fact that
it was not spelt out does not, in circumstances where the second
defendant was joined as a defendant, make it a case of non-joinder
which would preclude the true issues in dispute, notably whether
the
first defendant’s failure to deliver the bus amounted to a
repudiation which could lead to a valid cancellation, being
determined. It is to that issue that I then turn to consider.
The
repudiation
[29]
The plaintiff argues that the
repudiation, consisting of the first defendant’s refusal to
deliver the bus, was in breach of
the agreement on two grounds:
(a)
The first defendant’s insistence
that it had not agreed to accept the Mercedes bus as a trade-in on
the bus to settle the
balance of R410 000; and
(b)
The first defendant’s
demand that the plaintiff should pay to it the sum of R420 000,
as opposed to R410 000, for the
bus to be released to the plaintiff.
[30]
The first ground for
the repudiation involves a question of fact, that is whether in
respect of the balance of the deposit in the
sum of R 410,000, the
plaintiff’s version that an agreement was concluded in terms of
which the first defendant agreed to
accept the Mercedes bus as a
trade-in to make up the remainder of the deposit amount is correct,
or whether the first defendant’s
version that this was never
agreed, and that because the plaintiff refused to pay the remainder
of the deposit, the first defendant
was entitled to refuse to deliver
the bus. If the plaintiff’s version in this regard is correct,
then there would clearly
be a repudiation of the agreement, and vice
versa, if the first defendant’s version was accepted.
[31]
Most of the evidence focussed on whether
there had been such a subsequent oral agreement concluded between the
plaintiff and the
first defendant that the Mercedes bus would be
accepted as a trade in to make up the balance of the deposit of R410
000. In brief,
the evidence of Mr Maharaj was that he had a
discussion with Mr van Staden on 18 September 2018 whilst the latter
was travelling
in his vehicle, allegedly to Polokwane, during which
Mr Maharaj advised Mr van Staden that the only way the deal could
work was
if the first defendant accepted the Mercedes bus as a trade
in to cover the R410 000 still outstanding in respect of the deposit,
and Mr van Staden had said ‘yes, ok, ons sal ‘n plan
maak.’ Mr Maharaj understood that response to mean that
the
first defendant accepted to take the Mercedes bus as a trade in. Mr
van Staden denied such a discussion on the 18
September 2018, maintaining, with
reference to entries in his diary, that he was in his office on that
day. He also denied ever
having agreed to accept the Mercedes bus as
a trade-in, and emphasized the improbability of him concluding such
an agreement.
[32]
In regard to the second ground, the
question arising for determination is whether the demand for R420 000
constitutes an unequivocal
intention to repudiate the agreement. The
material facts, as regards this ground, are not disputed. It was
common cause that Mr
van Staden demanded payment of the sum of R420
000 from Mr Maharaj, being the R410 000 and an additional R10 000 as
directed by
the directors of the first defendant allegedly in respect
of an ‘administration fee.’ The issue is largely a
question
of law.
[33]
It is necessary to analyse these two
bases for resisting delivery of the bus separately. Before doing so
it is however necessary
to consider the relevant legal principles
relating to repudiation briefly.
What
amounts to a repudiation in law?
[34]
A repudiation occurs when one party to a
contract, without lawful grounds, conveys to the other party in words
or by conduct a deliberate
and unequivocal intention no longer to be
bound by the contract. The other party to the contract may then elect
to accept the repudiation
and rescind the contract. If he does so,
the contract comes to an end upon communication of his acceptance of
the repudiation to
the party who has repudiated.
[35]
The
test for repudiation is not subjective, but objective, the emphasis
is not on the repudiating party’s state of mind, on
what he
subjectively intended, but on what someone in the position of the
innocent party thought he intended to do. Repudiation
is not a matter
of intention, it is a matter of perception and the perception is that
of a reasonable person in the position of
the aggrieved party. The
test is whether such a notional reasonable person would conclude that
proper performance in accordance
with a true interpretation of the
terms of the agreement, will not be forthcoming. The inferred
intention serves as a criterion
for determining the nature of the
threatened breach. But the conduct from which the inference of
impending non- or mal-performance
is to be drawn, must be clear cut
and unequivocal i.e. not equally consistent with any other feasible
hypothesis. It has been said
that repudiation is ‘a serious
matter’ requiring anxious consideration and – because
parties must be assumed
to be predisposed to respect rather than to
disregard their contractual commitments – not likely to be
presumed.
[14]
[36]
In
amplification of the above, in
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
[15]
the following was said:
‘
[28]
The innocent party to a breach of contract justifying cancellation
exercises his right to cancel it (a) by words or conduct
manifesting
a clear election to do so (b) which is communicated to the guilty
party. Except where the contract itself otherwise
provides, no
formalities are prescribed for either requirement. Any conduct
complying with those conditions would therefore qualify
as a valid
exercise of the election to rescind. In particular, the innocent
party need not identify the breach or the grounds on
which he relies
for cancellation. It is settled law that the innocent party, having
purported to cancel on inadequate grounds,
may afterwards rely on any
adequate ground which existed at, but was only discovered after, the
time (cf
Putco Ltd v TV & Radio Guarantee Co (Pty) Ltd and
Other Related Cases
1985 (4) SA 809
(A) at 832C - D).’
(emphasis added)
[37]
In
Putco
Ltd v TV & Radio Guarantee Co (Pty) Ltd and other related
cases
[16]
the following remarks were made:
‘
The
letter cites two of the grounds mentioned in the agreement on which
Putco could rely to withdraw from it as the apparent reason
for
terminating the agreement. Had Putco been entitled to withdraw on the
grounds mentioned it would not have affected the rights
of the
parties flowing from the executed part of the agreement. As it
happened, Putco later abandoned any reliance on these grounds.
Where
a party seeks to terminate an agreement and relies upon a wrong
reason
to do so he is not bound thereby, but is entitled to take
advantage of the existence of a justifiable reason for termination,
notwithstanding
the wrong reason he may have given
.’
(emphasis added)
[38]
In
Stewart
Wrightson (Pty) Ltd v Thorpe
,
[17]
the then Appellate Division confirmed:
‘
It
has also been long recognised in our practice that a party purporting
to terminate for an invalid reason may later justify the
termination
on a different and valid ground existing at the time of the
termination.’
The
demand for payment of R420 000.
[39]
As regards the demand for the payment of
R420 000, as opposed to R410 000, the first defendant conceded that
the additional R10
000 was not due as part payment of the deposit, or
as a payment preliminary to the bus being delivered to the plaintiff.
[40]
In its declaration the plaintiff alleged
that Mr van Staden on behalf of the first defendant subsequent to the
conclusion of the
agreement advised Mr Maharaj, on behalf of the
plaintiff, that the first defendant’s directors refused to
release the bus
until R420 000 was paid as a deposit, and
therefore, the first defendant would be retaining the bus until such
time as the
R420 000 was paid by the plaintiff. It alleged further,
that consequently, the first defendant had breached and/or repudiated
the
agreement. It construed the first defendant’s demand for
payment of the sum of R420 000 to secure release of the bus, as R10
000 more than was required as the deposit for the purchase of the bus
by the plaintiff. This was a material breach as at no stage
was it
ever agreed, or even contemplated, that there would be any management
fee of R10 000 payable. In paragraph 10.4 of its declaration
the
plaintiff refers to the cancellation of the agreement ‘in light
of the First Defendant’s repudiation of the agreement
averred
to hereinabove . . .’ being the basis recounted above in this
paragraph.
[41]
The aforesaid
allegations were consistent with the evidence. It was not disputed
that R420 000 was demanded before the first defendant
would deliver
the bus to the plaintiff.
Mr
van Staden indicated that he was told by the first defendant’s
administration department to add R10 000 as a management
fee,
which ‘
incorporate
the delivery cost, registration fees, and all that’
.
He
testified that on
1 October 2018 he sent another SMS message enquiring from Leshen:
‘
Lee,
have you been able to transfer the balance of the deposit of
R420 000.00?’
[42]
The
formal demand for delivery of the bus, made by the plaintiff’s
attorney on 5 October 2018, elicited a considered
reply
[18]
from the first defendant’s attorney that ‘[o]ur client is
at a complete loss as to why your client suddenly pretends
to not
have any recollection of the deposit in the amount of R420,000-00
which deposit was supposed to be paid into our client’s
account
to trigger release of the said bus.’ The first defendant’s
attorney continued that ‘an amount of R420,000-00
in respect of
the deposit is still due and payable by your client.’
[43]
The first defendant
argued that the R10 000 difference between the outstanding
deposit amount of R410 000 and the request
to pay R420 000
did not feature, and was never relied upon in the evidence of Mr
Maharaj to constitute any breach or repudiation
of the agreement, but
only ‘
came
afterward,’
with which Mr Maharaj agreed. Specifically, Mr Maharaj conceded
that when the repudiation was accepted and the agreement
was
cancelled on 8 October 2018, no mention had been of the stipulation
for the additional R10 000 and that the cancellation
or
acceptance of repudiation was not based thereupon. The plaintiff’s
attorney’s correspondence when cancelling the
agreement because
of the first defendant’s breach or repudiation, also did not
specifically rely on the first defendant’s
demand for an
additional R10 000 as a basis for cancellation of the agreement. It
simply referred to the first defendant’s
failure to have
delivered the bus.
[44]
The plaintiff’s
reliance on the first defendant’s demand for payment in the
amount of R420 000 as opposed to R410 000
might be belated, and even
opportunistic.
But
that is irrelevant. Whether the first defendant might have released
the bus if R410 000 was paid by the plaintiff is also no
answer to
its demand that R420 000 was required to be paid before delivery of
the bus would occur, when that amount was not due.
Nor does
Mr van
Staden’s reply assist, when confronted with the demand for an
additional R10 000 and the request to pay R420 000,
that
‘
But
if he had paid me the R410 000.00 I would have released the
bus. It is as simple as that.’
It is not as simple as that.
[45]
The proper enquiry is
whether the repeated demand for payment of R420 000 before delivery
of the bus would be effected, was legally
claimable in terms of the
agreements. If it was not, then it is also no defence to the claim
for cancellation that the plaintiff
could have but never tendered to
make payment in the amount of R410 000.
[46]
To
an objective observer, the first defendant was not prepared, and even
after cancellation confirmed that it was not prepared,
to have
delivered the bus to the plaintiff unless the amount of R420 000 was
first paid to it as ‘the deposit.’ A possible
willingness
to release the bus if the amount of R410 000 was paid, as expressed
by Mr van Staden, is, at best, a subjective willingness
and not
objectively discernible. And the test for a repudiation is objective.
[47]
Accordingly, the
first defendant repudiated or breached the agreement and the law
entitles the plaintiff to cancel, as it did.
Did
the first defendant’s refusal to accept the trade-in as part of
the deposit constitute a repudiation?
[48]
In the light of my
aforesaid conclusion that the demand for R420 000 before the bus
would be delivered constituted a breach or repudiation
pursuant to
which the plaintiff could cancel, it is unnecessary to consider the
voluminous evidence that was focused on this issue.
I accordingly
refrain from doing so.
The
plaintiff’s alleged damages
[49]
The question then arises as to what
damages the plaintiff can recover arising from the cancellation.
The
instalments paid pursuant to the terms of the instalment sale
agreement
[50]
In terms of the instalment sale
agreement between the plaintiff and the second defendant, the
plaintiff was required to pay instalments
of R87 214.63 per month
commencing from 20 October 2018 with the last payment due on 20
September 2021. This instalment sale
agreement is separate and
distinct from the agreement concluded between the first defendant and
the second defendant in terms of
the Master Supply Agreement. The
first defendant obviously was not a party to the instalment sale
agreement. There would however
not have been an instalment sale
agreement absent an agreement between the first and second defendants
with the second defendant
agreeing to finance the balance of the
purchase price, and an agreement between the plaintiff and the first
defendant in terms
whereof the first defendant would sell the bus to
the second defendant.
[51]
In terms of the Master Supply Agreement
the plaintiff, as customer, purchased the bus from the first
defendant on behalf of the
second defendant. Ownership of the bus
would pass to the second defendant by delivery to the plaintiff on
behalf of the second
defendant. The plaintiff would only become owner
of and with full title to the bus once all the instalments had been
paid.
[52]
After it became
apparent that there was a dispute regarding whether the first
defendant would accept the Mercedes bus as a trade-in,
Mr Maharaj
instructed the second defendant to cancel ‘the agreement.’
That could only be the instalment sale agreement,
because the second
defendant was not a party to the purchase agreement between the
plaintiff and the first defendant. Yet, the
second defendant
stipulated a cancellation fee of R2 500. It is not clear on what
basis it would be entitled to do so. The second
defendant also
requested a consent to cancellation of ‘the agreement’
from the first defendant. Insofar as the plaintiff
identifies the
agreement it cancelled to be that between it and the first defendant,
it is unclear on what basis the second defendant,
who is not a party
to that agreement could insist on a written consent from the first
defendant as a precondition to a cancellation
of the agreement
between the plaintiff and the first defendant. Similarly, insofar as
the plaintiff sought to cancel the agreement
it had with the second
defendant, which is the instalment sale agreement, it is unclear on
what basis the second defendant could
insist on the consent of the
first defendant to such cancellation because the first defendant was
not a party to the instalment
sale agreement.
[53]
All of the above
points to the fact that the true transaction relating to the
acquisition of the bus, was much wider than pleaded
by the plaintiff
and involved an inter-dependence of the various agreements. Notably,
if one was cancelled, it would also impact
on the others, and that
would also affect any claim for damages.
[54]
Insofar
as the plaintiff cancelled the agreement it had with the first
defendant, and seeks declaratory relief relating to the cancellation
of that agreement, it is unclear if the declaratory relief sought is
confined to the agreement of purchase between the plaintiff
and the
first defendant, what ‘deal’ the plaintiff requested the
second defendant to cancel, other than the ‘deal’
consisting of the instalment sale agreement, or potentially the set
of interdependent but separate agreements which I have alluded
to
above. The set of agreements would however not require consensual
cancellation (or any payment as a pre-condition to cancellation)
if
there was an actionable breach or repudiation which would entitle the
plaintiff to cancel them regardless.
[55]
The request to cancel
the deal because the plaintiff had not received delivery of the bus
was conveyed to Mr Naidoo of the second
defendant in a letter dated 9
October 2018.
In
the said letter, Mr Maharaj stated that the first instalment of
R87 000 was due on 20 October 2018, he recorded that the
plaintiff had not received the new bus, and he requested the second
defendant to cancel the agreement (and, insofar as it was a
competent
fee to be charged), that the plaintiff’s account with the
second defendant could be debited with the cancellation
fee of R2
500.The aforesaid letter was followed up with another letter
addressed to the second defendant on 10 October 2018 wherein
the
plaintiff’s attorney very tellingly stated that:
‘
Our
client had no alternative but to cancel the transaction and has given
me your (sic) bank the authority to attend to the necessary
in that
regard.
We
enquire from you as to what steps your bank has taken to either claim
release of the new vehicle alternatively reverse the transaction,
as
it is the
de facto owner
of the financed vehicle. With
respect, your bank simply cannot play a passive role in this matter
and expect our client to
pay the instalments that may fall due while
the dispute remains unresolved.
It
would therefore be appreciated if you are (sic) kindly advise us of
your bank’s intentions immediately upon receipt hereof
to
enable our client to assess its position and pursue its right in
relation to the cancellation of the contract. Notwithstanding
the above, we require an undertaking from your bank that it will
not
process the debit order sent by our client as and when it falls due
.’
(emphasis
added)
[56]
The
legal position, and the consequences which should follow from a
cancellation due to the failure to deliver the bus, expressed
by the
author of this letter, are largely correct. The evidence of Mr
Govender, the representative of the second defendant, although
ultimately not particularly helpful, was also consistent with what
the author of the aforesaid letter contemplated as the consequences
that should follow. Mr Govender confirmed that there would be various
relationships between a party such as the plaintiff who wishes
to
acquire a specific vehicle, the second defendant partly financing
such transaction and paying the first defendant dealership,
and the
second defendant simultaneously concluding a separate agreement with
the plaintiff as purchaser in the form of an instalment
sale
agreement.
[19]
He was asked
whether in circumstances where the bus was never delivered, the
instalment sale agreement did not remain incomplete,
and whether the
failure to give delivery of the bus is not also a breach thereof.
Likewise, whether it would amount to a breach
of the agreement
between the second defendant and the first defendant.
[20]
He testified that he assumed that if the transaction was cancelled,
the dealership would have kept the bus and the administration
office
of the Vehicle and Finance Unit would have refunded Mr Maharaj the
money,
and further, that
the
finance amount paid to the first defendant would have to be paid back
to the second defendant. He indicated that if the transaction
was
cancelled on 8 October 2018, he doubted whether any instalments would
have had to be paid by the plaintiff. Regarding the contention
that
the plaintiff could not be expected to pay the instalments where it
has not taken delivery of the bus, Mr Govender agreed
that this is
‘an issue that could be raised.’ Finally, as regards the
instalments paid, he acknowledged that the instalments
would comprise
part capital and part interest.
[57]
Mr
Govender was referred to the plaintiff’s letter addressed to
the second defendant requesting that the agreement be cancelled,
for
which the second defendant required a cancellation fee of R2 500
to be paid. He confirmed that it was the instalment sale
agreement
that had to be cancelled. But then the question arises as to on what
basis the second defendant could lawfully demand
a consent to the
cancellation from the first defendant, as some sort of a
pre-condition to the cancellation of the instalment sale
agreement,
as the first defendant was not a party to the instalment sale
agreement. All of this demonstrates that the agreement
between the
plaintiff, first defendant and second defendant was not properly
pleaded.
[58]
No credible basis has been advanced to
establish any obligation that the plaintiff ‘had to pay’,
or had to carry on
paying the instalments in respect of the
instalment sale agreement, after it, on its version, cancelled ‘the
agreement.’
[59]
Furthermore, the plaintiff has not paid
all thirty six instalments provided for in the instalment sale
agreement, but only some.
It did not pay some of the later
instalments. I was advised from the bar during argument that the
plaintiff had received some sort
of indulgence from the second
defendant regarding the non-payment of instalments as a result of the
Covid-19 pandemic, but that
it subsequently ceased paying instalments
because it could not afford to pay them (the unpaid instalments).
There was no indication
that the second defendant took legal steps to
enforce payment of the instalments. That is not surprising, as the
second defendant
would probably be unable to prove a legal
entitlement to instalments in respect of a bus never delivered to its
customer.
[60]
That begs the question why the plaintiff
made and continued making any instalment payments to the second
defendant at all. It never
took delivery and never had possession of
the bus.
[61]
In the declaration the plaintiff simply
averred that it ‘has had to pay instalments’ for the bus.
But nothing has been
pleaded to establish that the plaintiff faced an
unassailable claim in law by the second defendant for payment of
these instalments.
Indeed, the contrary is the case. The instalment
sale agreement was a reciprocal agreement. If the plaintiff did not
receive the
bus, that is the first defendant had not released the bus
to the plaintiff as mutual customer on behalf of the second
defendant,
then the second defendant should not have made any payment
to the first defendant, and if it had, then it could not raise
instalments
against the plaintiff, but would have to demand the
return of whatever capital payment it had paid to the first
defendant, from
the first defendant. But it could not continue
claiming the instalments from the plaintiff, and if it did claim
payment of the
instalments, the plaintiff could successfully, and
should have raised the defence that the bus had not been delivered to
it, and
that it was excused from the payment of any instalments.
[62]
The plaintiff’s claim for damages,
represented by such instalments as it paid to the second defendant
until those ceased,
accordingly was not established and falls to be
dismissed.
Insurance
premiums paid in respect of the bus
[63]
In
its declaration the plaintiff similarly alleged that it ‘has
had to pay insurance over the new MAN bus to ensure that it
protects
its interests as per the ISA
[21]
with the Second Defendant from September 2018 to date.’
[64]
It is to the terms of the Instalment
Sale agreement and Release note that one must then turn to determine
whether the plaintiff
was obliged to pay the insurance premiums, and
hence whether it has suffered damages by doing so which it can
recover from the
first defendant. Paragraph 9.5 of the Instalment
Sale agreement, relating to ‘Conditions’ requires that
‘You
[the plaintiff] insure the Goods
as
required by us
.’ (emphasis
added) Clause 10 thereof providing for insurance with Standard
Insurance Limited, was not completed. Nor were
any insurance premiums
reflected in paragraph 5.2.5 of the instalment sale agreement. The
standard insurance with Standard Insurance
Limited was therefore not
taken up by the plaintiff.
[65]
According to annexure ‘D’ to
the declaration the plaintiff instead seemingly secured insurance
with Bryte Insurance
Company, through Westwood Insurance Brokers
(Pty) Ltd in respect of the bus, for a value of R2 942 000, from 20
September 2018.
That amount accords with the full purchase price of
the bus excluding Vat, in the sum of R2 941 800 reflected in the
invoice originally
issued by the first defendant to the third
defendant. The amount of the insurance premiums is not stated in
annexure ‘D’,
but was not disputed to be R5 092.86
per month.
[66]
The question however remains whether
that insurance was ‘required.’ The obligation to insure
must, in accordance with
the terms of the agreement, and can at
common law, only be from the time that the risk of loss or damage to
the bus would pass
to the plaintiff, and the plaintiff acquired an
insurable interest, or as may otherwise contractually be agreed.
[67]
The passing of any risk is expressly
regulated in the portion of the Release note signed by Mr Maharaj.
The release note is annexed
to the declaration as annexure ‘E.’
Its terms are averred to be incorporated as if specifically set out
in the declaration.
The relevant portion thereof provides as follows:
‘
2
Passing of Risk
2.1
The customer understands that when the customer takes delivery of the
goods, the customer takes all risk in
the goods. The customer
confirms that the supplier has clearly explained to the customer that
taking the risk in the goods means
that the customer must insure the
goods as from the day that the risk passes.
2.2
The customer will be liable, if the customer does not insure the
goods correctly, and if anything happens
to it or should any damage
or harm be caused to it even if the customer leaves the goods in the
supplier’s possession.’
[68]
Mr
Govender, of the second defendant, confirmed that the risk in the bus
was only to pass when the plaintiff took delivery. The
plaintiff
never took delivery of the bus. Accordingly, as the risk seemingly
did not pass, there was no insurable interest for
the plaintiff to
insure, and accordingly, there was no obligation to pay
insurance.
[22]
[69]
When the bus was not delivered by the
first defendant, the insurance on the bus should have been cancelled
forthwith. It is telling,
once again, that the plaintiff ceased
making payment of the insurance premiums post 1 March 2020. I
understood that this was for
reasons similar to those which resulted
in the payment of the instalments being stopped. There is no reason
why the payment of
the insurance premiums could not likewise have
been stopped from the outset. Post cancellation of the agreement and
the instalment
sale agreement the plaintiff could have had no
expectation whatsoever of taking delivery of the bus. Accordingly,
there would be
no need for any insurance.
[70]
If it was to be argued that prudence or
otherwise reasonably dictated that insurance had to be put in place
from 20 September 2018,
in the expectation that delivery of the bus
could be imminent pursuant to the demand that the bus be delivered by
the first defendant,
then it is clear that by the time ‘the
agreement’ was cancelled on 8 October 2018, whatever legal
right the plaintiff
might previously have had to claim delivery of
the bus, had ceased. As regards any insurance costs incurred during
the period of
expectation of such a possible delivery, no evidence
was adduced as to what the insurance premium for such limited period,
if payable,
would have been. Such evidence could have been adduced,
for example from the insurance broker. In the absence of such
evidence
the plaintiff has not established its damages even in
respect of the limited period from 20 September 2018 to the date of
cancellation,
that is if there was even a basis to conclude that the
risk in and to the bus had somehow passed, despite delivery to the
plaintiff
not having occurred, during that period.
[71]
No legal basis has been advanced on
which the plaintiff was legally obliged to insure the bus where it
had never been delivered
to the plaintiff. All the more so where the
plaintiff had cancelled the agreement and hence terminated any right
to ever receive
delivery of the bus. The claim for these insurance
premiums as damages accordingly was not established.
Licence
fees
[72]
The first defendant registered the bus
with the Motor Vehicle Licencing Authorities, with the second
defendant as ‘title holder’
and the plaintiff as ‘owner’
on 25 October 2018, that also being reflected as the ‘Ownership
start date’
on the eNaTIS documentation, annexed as annexure
‘K’ to the declaration. Again, it was averred in the
declaration that
‘the contents of annexure “K” be
incorporated herein as though specifically averred to.’ The
aforesaid
facts are therefore part of the averments in the
pleadings.
[73]
The foundation of the plaintiff’s
claim in regard to licence fees is formulated as follows in the
declaration: the first defendant
‘unlawfully and fraudulently
registered the bus in the name of the Plaintiff and the Second
Defendant on the National Information
Traffic Management System and
obtained an eNaTIS document in respect thereof, a copy of which is
attached hereto and marked as
annexure “K,”’ which
was issued on 25 October 2018; and a ‘licence fee of R180.00
(ONE HUNDRED AND EIGHTY
RAND) was paid for the licencing of the new
MAN bus in the name of the Plaintiff and the Second Defendant after
the cancellation
of the agreement by the First Defendant.’
[74]
The basis of the claim for the ongoing
licence fees is then pleaded as follows:
‘
The
Plaintiff has had to pay licence fees to the Department of Transport
(“the Department”) in respect of the new MAN
bus in view
of the fact that should it not do so, the Department was unwilling to
release licence discs in respect of the other
buses owned and
operated by the Plaintiff which caused it significant prejudice.
Resultantly, the Plaintiff was obliged to pay
a licence fee of the
new MAN bus despite the fact that it never intended taking ownership
or beneficial possession thereof subsequent
to the cancellation of
the sale and has since never had possession, use and enjoyment
thereof.’
[75]
Earlier in the declaration, in support
of its allegation that the licence fees had to be paid because the
licencing authority would
not issue licences in respect of other
busses operated by the plaintiff, the plaintiff annexed the notice of
motion in case number
2361/19P as annexure ‘N’ to its
declaration, again praying ‘that the contents of annexure “N”
be
incorporated herein as though specifically averred to.’ In
that notice of motion the plaintiff claimed the following relief
as
against the first defendant, the second defendant, the MEC for
Transport: KZN, the MEC for Transport: Gauteng and the National
Minister of Transport, as the first to fifth respondent respectively:
‘
1.
1.1
That the licencing transaction whereby
the motor vehicle described as a 2018 MAN 26.36 D HB4 bus with a
chassis number: AAMHB41808PX35773
and the engine number:
505470212B4704 which was licensed in the name of the Applicant as the
owner and the Second Respondent, as
a titleholder, a copy of which
transaction is annexure “A” hereto, be and is hereby
declared null and void and cancelled.
1.2
That the Third, Fourth and Fifth
Respondents be directed to restore the licence status of the motor
vehicle referred to in paragraph
1.1 hereinabove to its previous
status on the e NaTIS system is reflected in annexure “B”
hereto.
1.3
That the decision of the Third and Fifth
Respondents not to issue the Applicant with any further licence discs
and/or renewals in
view of outstanding licence fees for the motor
vehicle referred to in paragraph 1.1 hereinabove be and is hereby
reviewed and set
aside.
1.4
That the Third and Fifth Respondents be
directed to issue the renewal licence discs to the Applicant for the
motor vehicles referred
to in annexures “C1 to C4”
hereto.
1.5
That the Third and Four Respondents be
directed to issue the Applicant with the renewal licence discs upon
application by it for
motor vehicles owned by it upon compliance with
all legal requirements for such renewal licence discs in accordance
with the relevant
provisions of the
National Road Traffic Act of
1996
.
1.6
Costs of the application in the event of
opposition hereto.
1.7
Such further and alternative relief that
the above Honourable Court may deem appropriate.
2.
KINDLY
TAKE NOTICE that the relief sought in paragraphs 1.4 and 1.5
hereinabove shall operate as Interim Interdict Orders pending
the
finalisation of this application.
[23]
[76]
As regards the quantification of its
claim in respect of licence fees, the plaintiff in its declaration
(see paragraph 15.4(e))
avers that:
‘
The
Plaintiff has paid the licence fee for the year 2019 in view of the
First Defendant’s fraudulent registration of the new
MAN bus in
its name as averred to at paragraph 12.1 (a) to (c)
[24]
hereinabove in the amount of R 119, 937.90 (ONE HUNDRED AND NINETEEN
THOUSAND NINE HUNDRED AND THIRTY SEVEN RAND AND NINETY CENTS)
as
reflected in annexure “O” hereto;’
and
‘
Future
licence fees that will be due and payable by the Plaintiff to the MEC
and the Department for 2020, in respect of the new
MAN bus in the
amount of R 52, 000.00 (FIFTY TWO THOUSAND RAND).’
[77]
Annexure
‘O’ to the declaration is a copy of a bank statement from
Standard Bank in respect of a business current account
operated by
the plaintiff. It also shows a reduced size copy of a cheque no
113208 drawn on that bank account, although the payment
by that
cheque is not reflected as a separate entry on the statement, for an
amount of R119 937.90 dated 9 July 2019 and payable
to what
seems to be ‘KZN Transport Revenue’.
[25]
[78]
The damages claim persisted with in
respect of the licence fees, as set out earlier in this judgment, are
as follows:
Licence
– 2019
R 119 937.90
Licence
– 2020
R 46 104.00
It
is not clear what happened to the licence fee of R180 alleged in the
declaration. It is seemingly not part of the claim? Nor
is it
clear how the licence fee of R52 000 alleged in the declaration
became R46 104. Presumably the amount alleged in the declaration
might have been an estimation of the licence fee for 2020, because
the alleged payment for 2020 possibly had not yet been made
when the
declaration was signed. No documentary proof of payment of that
amount was annexed. But be that as it may.
[79]
The factual position is that the bus was
registered in the name of the plaintiff after it had cancelled the
purchase agreement with
the first defendant. Whether such
registration was fraudulent or not, but
a
fortiori
if it was unlawful and
fraudulent, the plaintiff could never be held liable to the licencing
authority for ongoing licence fees
in respect of the bus where the
underlying agreement had been cancelled. At most there might be some
administrative fee relating
to the reversal of the registration. At
best, for the purposes of the plaintiff’s claim, liability
could arise for the initial
‘licence fee’ of R180 if
proof of payment thereof was provided, or for some administrative
fee. But this was not case.
[80]
The plaintiff was entitled to apply for
the registration of the bus to be reversed ab initio, alternatively
for it to be deregistered
retrospectively from the date of
registration. The cancellation of the agreement preceded the date of
registration. Whether effected
fraudulently or innocently, in the
light of the cancellation of the agreement prior to registration, the
plaintiff did not face
an unassailable claim by the licencing
authority for licence fees from 20 October 2018 until 31 March 2019,
and certainly not for
2019 and 2020. Again, it seems that the licence
fees for 2021 were not paid by the plaintiff, and rightly so. Which
begs the question
why the licence fees for the years prior to 2020
were not similarly simply not paid.
[81]
The licencing authorities could not hold
the plaintiff to ransom, on the plaintiff’s version effectively
extorting payment
of any licence fees in respect of the bus, which
the plaintiff never received delivery of and, pursuant to the
cancellation, no
longer had any intention ever to take delivery of,
on pain of not being issued licences in respect of other buses
operated by the
plaintiff. If the licencing authorities did so, then
it was incumbent on the plaintiff to resist such conduct and apply
for urgent
appropriate interim relief, which it did not do, and to
pursue it to finality. The solution was not to effectively condone
such
unlawful behaviour by the licencing authorities, to succumb to
its unlawful and extortionist demands, in the comfort of then seeking
an indemnity in respect of such payments as a damages claim against
the first defendant.
[82]
The claim for damages comprising the
licence fees accordingly falls to be dismissed.
Repayment
of the R340 000
[83]
Reference has been made earlier to the
R340 000 deposit paid by the third defendant to the first defendant,
having been ‘made
over’ as part payment of the deposit
required to be paid in respect of the instalment sale agreement
concluded by the plaintiff
with the second defendant, as also
reflected on the invoice issued by the first defendant to the second
defendant.
[84]
The
plaintiff seeks to recover this amount as part of its damages,
[26]
on the following basis:
‘
The
sum of R 340 000 (THREE HUNDRED AND FORTY THOUSAND RAND) paid by the
Third Defendant to the Plaintiff as a holding deposit of
the new MAN
bus . . . was ceded by the Third Defendant to it as per the contents
of annexure “P” hereto. The Plaintiff
prays that the
contents thereof be incorporated herein as though specifically
averred to.’
[85]
Annexure ‘P’ is headed
‘
Cession of claim or right of
action’
and provides that the
third defendant, as cedent ‘hereby cedes, transfers and makes
over to the cessionary, the cedent’s
right, title and interest
in and to the said claims referred to above.’ The ‘said
claims’ are described in the
preamble to the written cession as
the claim the third defendant has against the first defendant ‘for
refund of R340,000
relating to a deposit paid to them for a vehicle
that was not purchased (hereinafter referred to as “the said
claim”).’
[86]
On the evidence of Mr Maharaj and
Leshen, the R340 000 paid by the third defendant as a deposit to the
first defendant in
respect of the offer to purchase the bus, which
purchase was aborted when the third defendant did not qualify for
finance for the
balance of the purchase price, and which undoubtedly,
if matters ended there would have given rise to a valid claim by the
third
defendant for repayment against the first defendant, was
extinguished by the third defendant agreeing to make that payment
over
as partial payment by the plaintiff of the deposit required in
terms of the purchase agreement for the bus when the plaintiff came
to be substituted as purchaser. The third defendant thereafter no
longer had any claim against the first defendant, but only a
claim
against the plaintiff for payment of the R340 000, otherwise it could
not be said to have made that payment over to the plaintiff
as a part
payment of the deposit due by the plaintiff to the first defendant.
The evidence was to the effect that the plaintiff
had not yet paid
the R340 000 to the third defendant, but it was not suggested
that it would not be due by the plaintiff to
the third defendant.
[87]
The third defendant accordingly had no
claim remaining against the first defendant for payment of the R340
000, to cede to the plaintiff
on 20 November 2018, being the date the
cession was signed. Significantly, the cession expressly provides,
and again this annexure
to the declaration is attached on the basis
that ‘[t]he Plaintiff prays that the contents thereof be
incorporated herein
as though specifically averred to’, that:
‘
It
is understood and agreed that the cedent does not warrant the
validity of the said claim and shall not be liable for damage to
the
cessionary in respect of any fees, costs or charges that may be
incurred in prosecuting the said claim or for any damage that
may be
sustained by the cessionary in the event of the said claim proving
irrecoverable for any reason whatsoever.’
The
concluding paragraph of the cession confirms that the plaintiff as
cessionary ‘accepts the said cession upon and subject
to the
terms and conditions of this agreement.’
[88]
As a ceded claim of the third
defendant’s claim against the first defendant, being pursued by
the plaintiff as cessionary,
the claim for the R340 000 must fail.
However, as a part payment of the deposit the plaintiff was required
to provide and being
the basis on which the first defendant retained
the R340 000, following cancellation of the purchase agreement, the
R340 000 should
be restored to the plaintiff. That basis, to claim a
refund of the R340 000, although not specifically pleaded as such,
was in
my view sufficiently ventilated at a factual level as to
permit this court to order the payment of that amount to the
plaintiff,
but subject to a possible adjustment regarding interest
and costs.
[89]
Interest was claimed in respect of the
damages claim as ‘Interest at the prescribed rate
a
tempore morae
.’ No adjustment
regarding the prayer for interest accordingly seems required, but to
the extent that it might, I intend making
it clear that the first
defendant must pay the sum of R340 000 to the plaintiff, but that
mora interest thereon shall run from
the date of this judgment.
Conclusion
[90]
The correct legal position appears to be
that the entire transaction, comprising the various agreements
relating to the purchase
of the bus, was cancelled. That obviously
includes a cancellation specifically of the separate agreement, such
as it was, between
the plaintiff and the first defendant, being the
declaratory relief claimed by the plaintiff. That cancellation would
also affect
the agreement between the first and second defendants,
and the agreement between the plaintiff and the second defendant. No
similar
declaratory relief has however been claimed against the
second defendant in regard to the agreement between it and the
plaintiff,
or of the agreement between it and the first defendant.
The agreement between the plaintiff and the first defendant, as I
endeavoured
to show above, does not on its own represent the entire
transaction relating to the acquisition of the bus. That agreement
was
however the foundation and raison d’être for the
existence of the agreement between the first and second defendants,
and the instalment sale agreement between the plaintiff and the
second defendant. When the agreement between the plaintiff and
the
first defendant was cancelled, the plaintiff cannot legally claim
that the second defendant would have ongoing unassailable
claims for
instalment payments against it in terms of the instalment sale
agreement. Nor was there a valid basis for the continued
payment of
insurance premiums in respect of the bus, where the risk had not
passed to the plaintiff. I am however restricted in
the relief that I
may grant to the declaratory relief that was claimed. The other
consequences that should follow, should be obvious.
[91]
It follows that the plaintiff is
entitled to the following relief against the first defendant:
(a)
An order declaring that the agreement
concluded between the plaintiff and the first defendant in respect of
the purchase of the
new MAN bus is cancelled;
(b)
Payment of the sum of R340 000;
(c)
Interest on the sum of R340 000
a
tempore morae
at the prescribed rate
from date of judgment to date of payment.
The
further relief claimed falls to be dismissed.
[92]
It also follows that the claim in
reconvention falls to be dismissed.
Costs
[93]
The outcome of the claim in reconvention
was dependent upon whether a repudiation and subsequent valid
cancellation could be established
by the plaintiff. The plaintiff has
succeeded in doing so, but with reliance on the ground that the
demand for payment of the sum
of R420 000, when only R410 000 was on
the first defendant’s version legally claimable, amounted to a
repudiation. That disposed
of the dispute between the parties,
without the need to make a determination as to whether there was an
agreement that the Mercedes
bus would be accepted as a trade in for
the balance of the deposit in the sum of R410 000. Most of the
evidence was devoted to
attempting to decide that issue, which in the
light of the findings in this judgement, became unnecessary to
decide. The plaintiff
however had to persist with its contentions in
regard to the demand for the additional R10,000 amounting to a
repudiation, as this
was not conceded by the first defendant when it
could have done so. To that extent the plaintiff enjoyed success.
[94]
But the plaintiff’s success was
limited as it only succeeded with an order for repayment of the sum
of R340 000 and then not
on the basis on which it was pleaded. Its
claim for damages, which was substantial, was otherwise unsuccessful.
[95]
Much uncertainty arose because of the
imprecise manner in which the plaintiff’s cause of action was
pleaded in some respects.
It seems to me, in the exercise of my
discretion on costs, having regard to the extent of success enjoyed
by both parties in regard
to what was a difficult matter, time spent
on issues in evidence, and the ultimate judgement, that the plaintiff
should be entitled
to one third of its costs of the claim in
convention, and the costs in defending the first defendant’s
claim in reconvention.
In respect of all reserved costs, each party
is directed to pay its own costs.
Order
[96]
The following order is granted:
(a)
In respect of the plaintiff’s
claim in convention the following orders are granted:
(i)
It is declared that the agreement
concluded between the plaintiff and the first defendant in respect of
the purchase of the new
MAN bus is cancelled;
(ii)
The first defendant is directed to pay
an amount of R340 000 to the plaintiff together with interest thereon
at the prescribed rate
a tempore
morae
from date of judgment to date
of payment;
(iii)
The further relief claimed is dismissed;
(iv)
The first defendant is directed to pay
one third of the plaintiff’s costs of the claim in convention.
(b)
The first defendant’s claim in
reconvention is dismissed with costs.
(c)
In respect of all costs previously
reserved, each party is directed to pay its own costs.
Koen
J
APPEARANCES
For
the
plaintiff: Mr
S Nankan
Instructed
by
DMA
Inc
c/o
Carlos Miranda Attorneys
Pietermaritzburg
For
the first
defendant: Mr
J A Venter
Dr
T C Botha Attorneys Inc
c/o
Venn’s Attorneys
Pietermaritzburg
[1]
Rule
18(3).
[2]
Rule
18(4).
[3]
Imprefed
(Pty) Ltd v National Transport Commission
1993 (3) SA 94
(A) at 107C-H,
Swissborough
Diamond Mines (Pty) Ltd and others v Government of the Republic of
South Africa and others
1999 (2) SA 279
(T) at 324F-G,
Connolloy
v The Southern Life Association Ltd and another
2000 JDR 0629 (SE) para 12,
Minister
of Land Affairs and Agriculture and others v D & F Wevell Trust
and others
2008 (2) SA 184
(SCA) para 43 at 200,
Home
Talk Developments (Pty) Ltd and others v Ekurhuleni Metropolitan
Municipality
2018 (1) SA 391
(SCA) paras 28 – 29.
[4]
Victoria
Falls & Transvaal Power Co Ltd v Consolidated Langlaagte Mines
Ltd
1915 AD 1
at 22,
Drummond
Cable Concepts v Advancenet (Pty) Ltd
[2018] ZAGPJHC 636,
2020 (1) SA 546
(GJ) paras 9 – 10.
[5]
Annexure
‘B’ to the declaration.
[6]
Annexure
‘E’ to the declaration.
[7]
Annexure
‘C’ to the declaration.
[8]
Annexure
‘J’ to the Declaration.
[9]
Annexure
‘A’ to the Declaration.
[10]
Clause 4.4.
[11]
Clause 7.
[12]
Clause 8.1.8.
[13]
Wynns
Car Care Products (Pty) Ltd v First National Industrial Bank Ltd
1991
(2) SA 754 (A).
[14]
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
2001 (2) SA 284 (SCA).
[15]
Datacolor
International (Pty) Ltd v Intamarket (Pty) Ltd
[2000] ZASCA 82
;
2001
(2) SA 284
(SCA) para 28.
[16]
Putco
Ltd v TV & Radio Guarantee Co (Pty) Ltd and other related cases
1985 (4) SA 809
(A) at 832C- D.
[17]
Stewart
Wrightson (Pty) Ltd v Thorpe
1977 (2) SA 943
(A) at 953G.
[18]
Notwithstanding
the agreement already having been cancelled in an email to the first
defendant directly on 8 October 2018.
[19]
Mention
was made of a
tripartite
agreement but ultimately Mr Govender said that there are two
separate agreements.
[20]
Mr
Govender confirmed that the only agreement that exists between the
first defendant and the second defendant is the master supply
agreement
.
[21]
Instalment
Sale Agreement.
[22]
The plaintiff also never of its own volition left the bus in the
possession of the first defendant for the purposes of clause
2.2 –
certainly that was never suggested in the evidence.
[23]
According to the court file, on 29 May 2022, Bezuidenhout J
adjourned the application
sine
die
,
ordering the applicant to pay the wasted costs. The application does
not appear to have been taken any further and no interim
relief was
persisted with.
[24]
Being what is set out above.
[25]
The last word of the payee’s identity is obscured by a bank
stamp, but it looks like ‘Revenue.’.
[26]
Paragraph 15.4(g) of the declaration.